BASF in North America Report 2011 BASF in North … in North America Report 2011 BASF’s segments Chemicals In the Chemicals segment, we supply products to customers in the chemical,

BASF in North America

Report 2011

BASF in North America Report 2011


Report 2011


Report 2011

First Quarter 2012 Results: BASF in North America

Sales in North America declined by 4% in U.S. dollars, remaining at the level of the previous first quarter in euro terms. The optimization of our supply chain for steam cracker products in the third quarter of 2011 led to a decline in volumes. Higher sales prices and positive currency effects offset this decline. We posted a significant sales increase in the Performance Products segment. At €370 million, earnings were €23 million below the level of the previous first quarter. This was due to lower earnings contributions from the Chemicals and Plastics segments resulting from lower margins and the scheduled shutdown of several plants in Geismar, Louisiana.

1st Quarter

2012 2011 Change in %

Sales million € 20,590 19,361 6.3

Income from operations before depreciation and amortization (EBITDA) million € 3,890 3,365 15.6

Income from operations (EBIT) before special items million € 2,532 2,732 (7.3)

Income from operations (EBIT) million € 3,120 2,550 22.4

Financial result million € (73) 830 .

Income before taxes and minority interests million € 3,047 3,380 (9.9)

Net income million € 1,724 2,411 (28.5)

Earnings per share € 1.88 2.62 (28.2)

Adjusted earnings per share € 1.57 1.94 (19.1)

Cash provided by operating activities million € 1,571 2,255 (30.3)

Additions to long-term assets1 million € 739 522 41.6

Research and development expenses million € 406 380 6.8

Amortization and depreciation1 million € 770 815 (5.5)

Segment assets (as of March 31)2 million € 52,547 48,507 8.3

Personnel costs million € 2,394 2,184 9.6

Number of employees (as of March 31) 111,533 109,589 1.8

1 Intangible assets and property, plant and equipment (including acquisitions)2 Intangible assets, property, plant and equipment, inventories and business-related receivables

BASF GroupFirst Quarter 2012

BASF Group 2011

Economic data

2011 2010 Change in %

Sales million € 73,497 63,873 15.1

Income from operations before depreciation and amortization (EBITDA) million € 11,993 11,131 7.7

Income from operations (EBIT) before special items million € 8,447 8,138 3.8

Income from operations (EBIT) million € 8,586 7,761 10.6

Income before taxes and minority interests million € 8,970 7,373 21.7

Net income million € 6,188 4,557 35.8

Earnings per share € 6.74 4.96 35.9

Adjusted earnings per share € 6.26 5.73 9.2

Dividend per share € 2.50 2.20 13.6

Cash provided by operating activities million € 7,105 6,460 10.0

Additions to long-term assets1 million € 3,646 5,304 (31.3)

Depreciation and amortization million € 3,407 3,370 1.1

Return on assets % 16.1 14.7 –

Return on equity after tax % 27.5 24.6 –

Research and development expenses million € 1,605 1,492 7.6

Environment and safety

2011 2010 Change in %

Emissions of greenhouse gases (CO2 equivalents) million metric tons/year 25.8 25.7 0.4

Emissions to air (air pollutants)2 thousand metric tons/year 33.8 33.9 (0.3)

Emissions of organic substances to water2 thousand metric tons/year 24.3 26.1 (6.9)

Energy efficiency in production processes metric tons of sales product/MWh 0.63 0.61 2.1

Transportation accidents per 10,000 shipments 0.18 0.28 (35.7)

Number of environmental and safety audits 97 97 0

Operating costs for environmental protection facilities million € 850 729 16.6

Investments in environmental protection million € 190 122 55.7

Employees and society

2011 2010 Change in %

Employees as of December 31 111,141 109,140 1.8

Apprentices/trainees as of December 31 2,565 2,442 5.0

Personnel expenses million € 8,576 8,228 4.2

Donations and sponsorship million € 48.7 49.8 (2.2)

Annual bonus % of Group companies 93.7 92.9 0.8

Lost time injury rate per million working hours 1.9 2.0 (5.0)

Health Performance Index 0.86 – –

1 Including acquisitions2 Excluding emissions from oil and gas production

* The cover photo shows (left to right) Todd Hicks, Melissa Feigelson and Donnalyn Robles working outside at BASF‘s headquarters in Florham Park, NJ.


Report 2011


Report 2011

BASF’s segments

ChemicalsIn the Chemicals segment, we supply products to customers in the chemical, electronics, construction, textile, auto-motive, pharmaceutical and agricultural industries, as well as many others. We also ensure that other BASF segments are supplied with chemicals for produ-cing downstream products. Our portfolio ranges from basic chemicals, glues and electronic chemicals for the semicon-ductor and solar cell industries, to sol-vents and plasticizers, as well as starting materials for detergents, plastics, textile fibers, paints and coatings, and phar-maceuticals.

PlasticsThe Plastics segment includes a broad range of products, system solutions and services. We offer a number of engineering plastics for the automotive and electrical industries as well as for use in household appliances and sports and leisure products. Our styrenic foams are used as insulating materials in the construction industry and in packaging. Our polyurethanes are extremely versatile: As soft foams, for example, they improve car seats and mattresses, and as rigid foams they increase the energy efficiency of refrigerators.

Performance ProductsPerformance Products lend stability and color to countless everyday items and help to improve their application profile. Our product portfolio includes vitamins and food additives as well as ingredients for pharmaceuticals and for hygiene, home and personal care items. Other Performance Products improve processes in the paper industry, oil and gas production, mining and water treat-ment. They can also enhance the efficiency of fuels and lubricants, the effectiveness of adhesives and coatings, and the stability of plastics.

Key data Chemicals (million €)

2011 2010 Change in %

Sales 12,958 11,377 13.9

EBITDA 3,188 3,000 6.3

Income from operations before special items

2,441 2,302 6.0

Income from operations (EBIT)

2,442 2,310 5.7

Sales (%)

1 Inorganics 11

2 Petrochemicals 68

3 Intermediates 21

1

2

3

€12,958million

wird a

ktual

isier

t

Sales (%)

1 Performance Polymers 47

2 Polyurethanes 53

12

€10,990million

Sales (%)

1 Dispersions & Pigments 22

2 Care Chemicals 33

3 Nutrition & Health 12

4 Paper Chemicals 10

5 Performance Chemicals 23

1

23

4

5

€15,697million

Key data Plastics (million €)

2011 2010 Change in %

Sales 10,990 9,830 11.8

EBITDA 1,678 1,721 (2.5)


1,203 1,284 (6.3)


1,259 1,273 (1.1)

Key data Performance Products (million €)

2011 2010 Change in %

Sales 15,697 12,288 27.7

EBITDA 2,312 2,162 6.9


1,727 1,554 11.1


1,361 1,345 1.2

Functional SolutionsIn the Functional Solutions segment, we bundle system solutions and innovative products for specific sectors and customers, in particular for the automotive, chemical and construction industries. Our portfolio comprises automotive and industrial catalysts, automotive and industrial coatings and concrete admix-tures as well as construction systems such as tile adhesives and architectural coatings.

Agricultural SolutionsOur crop protection products guard against fungal diseases, insects and weeds and they increase quality and secure crop yields. Our research in plant biotechnology concentrates on plants for greater efficiency in agriculture, healthier nutrition and for use as renewable raw materials. Research and development expenses, sales, earnings and all other data pertaining to BASF Plant Science are not included in the Agricultural Solutions segment; they are reported in Other.

Oil & GasAs the largest German producer of oil and gas, we focus our exploration and production on oil- and gas-rich regions in Europe, North Africa, South America, Russia and the Caspian Sea region. Together with our Russian partner Gazprom, we are active in the transport, storage and trading of natural gas in Europe.

Key data Functional Solutions (million €)

2011 2010 Change in %

Sales 11,361 9,703 17.1

EBITDA 921 861 7.0


559 467 19.7


427 457 (6.6)

Key data Agricultural Solutions (million €)

2011 2010 Change in %

Sales 4,165 4,033 3.3

EBITDA 981 938 4.6


810 749 8.1


808 749 7.9

Key data Oil & Gas (million €)

2011 2010 Change in %

Sales 12,051 10,791 11.7

EBITDA 2,616 2,977 (12.1)


2,111 2,430 (13.1)


2,111 2,334 (9.6)

Net income 1,064 923 15.3

Sales (%)

1 Catalysts 56

2 Construction Chemicals 19

3 Coatings 25

1

2

3

€11,361million

Sales (%)

1 Crop Protection 100

1

€4,165million

Sales (%)

1 Exploration & Production 26

2 Natural Gas Trading 74

1

2

€12,051million


Report 2011 1BASF in North America

Report 2011

About this report

“BASF in North America – Report 2011” is published annually as a concise document about the development, progress and performance of our activities across the three spheres of influence – economy, environment, and society – in North America. This report also carries an overview of BASF Group along with its financial performance, prepared in accordance with the requirements of the German Commercial Code and the International Financial Reporting Standards (IFRS). The reporting period for this publication was the financial year 2011. Local sales figures in this report refer to sales by BASF Group companies to customers located in North America. Environmental data at joint venture companies in North America are reported pro rata based on our stake. Employee numbers refer to total employment by BASF Group companies in North America and companies where BASF has a stake of 50% or greater, as of December 31, 2011.

IntroductionLetter from Hans Engel, Chairman and CEO

Welcome to the 2011 edition of BASF in North America.

2011 was a very successful and in many ways a pivotal year for BASF in Canada, the Caribbean, Central America, Mexico and the United States. We achieved new record highs in both sales and earnings during 2011 and charted some significant progress toward sustainable, long-term growth in the region. The first quarter of 2012 represented a solid start to the year.

2011 was the International Year of Chemistry, and BASF in North America seized this opportunity to create some chemistry with our customers and stakeholders. Through four events in Detroit, Mexico City, Toronto and New York, we demonstrated the breadth of BASF’s capabilities, extended our hand as an innovation partner, and strengthened relationships with important customers, suppliers, universities and other organizations.

The Cognis integration was another major milestone of 2011. The talented people, market positions and excellent products we added contributed significantly to BASF’s strong performance in 2011 and promise to continue doing so well into the future. The opening of our methylamines plant in Geismar, Louisiana, and the ongoing construction of our battery plant in Elyria, Ohio, were further indications of BASF’s continued growth in North America.

In November of 2011, BASF rolled out its new global strategy “We create chemistry,” kicking off a region-wide effort to understand and apply “We create chemistry” and to integrate its implementation with the regional North America 2020 Strategy. It is a natural fit, urging us to add value as one unified global company and re-affirming our strong focus on customers, innovation, our team and on driving sustainable solutions.

With a global population projected to reach 9 billion by 2050, humankind faces some significant challenges in years to come. Together with our customers, suppliers, partners and stakeholders, BASF intends to be at the forefront of the necessary solutions.

I look forward to working with you as we strive to create the chemistry for a sustainable future.

Best regards,

Hans EngelChairman and CEOBASF North America

Hans Engel

Hans Engel has worked at BASF for 24 years. In addition to being the Chairman and CEO of BASF Corporation, he is the Chief Financial Officer of BASF Group. He is also responsible for the areas of Finance; Catalysts; Information Services; Corporate Controlling and Corporate Audit.

BASF Report 2011BASF in North America

Introduction / Letter from Hans Engel 01

The BASF Group 02

BASF in the Regions 06

BASF in North America 08

BASF in Mexico, Central America and the Caribbean 10

BASF in Canada 11

BASF’s Sustainable Headquarters in North America 12

Our History 14

Strategic Overviews 16

Resources, environment and climate 17

Food and nutrition 18

Quality of life 19

BASF’s Innovations 20

Sustainable Development 24

Environment & Safety 26

Employees 32

Community Relations 34

Science Education Initiatives 35

Contacts 37



Report 2011 The BASF Group

We are the world’s leading chemical company: The Chemical Company. Around 111,000 employees work in the BASF Group, helping our customers from nearly all sectors and almost every country in the world to be more successful. Our broad portfolio is arranged into six segments: Chemicals, Plastics, Performance Pro-ducts, Functional Solutions, Agricultural Solutions and Oil & Gas.

Markets and sites BASF has subsidiaries in more than 80 countries and supplies products to a large number of business partners in nearly every part of the world. In 2011, we achieved 53% of our sales with customers in Europe, of which 30% were in the Oil & Gas seg-ment. In addition, 19% of sales were generated in North Ame-rica; 20% in Asia Pacific; and 8% in South America, Africa, and the Middle East. We operate six Verbund sites as well as approximately 370 additional production sites worldwide. Our Verbund site in Ludwigshafen is the largest integrated chemical complex in the world. This was where the Verbund concept was developed and continuously optimized before it was applied to other sites around the world. The Production Verbund, for example, intelligently links pro-duction units and energy demands so heat from production pro-cesses can be used as energy in other plants, saving both primary resources and costs. Another important part of the Verbund concept is the Know-How Verbund. Expert know-ledge is pooled in our technology platforms.

For more on the Verbund concept, see basf.com/verbund_e

Organization of the BASF GroupBASF’s six business segments contain 15 divisions which bear the operational responsibility and manage our 70 global and regional business units. The divisions develop strategies for our 76 strategic business units and are organized according to sectors or products. The regional divisions contribute to the local development of our business and help to maximize market potential. They are also responsible for optimizing the infrastructure for our busi-ness. For financial reporting purposes, our divisions are grouped into the following four regions: Europe; North America; Asia Pacific; and South America, Africa, Middle East. Three central divisions, five corporate departments and ten competence centers provide Group-wide services such as finance, investor relations, communications, human resources, research, engineering and site management.

The BASF GroupAt a glance

The BASF Group

− Six Verbund sites and around 370 other production sites worldwide; approximately 111,000 employees − Ludwigshafen is the largest BASF Verbund site and where the Verbund concept was created − Verbund: intelligent plant networking in the Production Verbund; Know-How and Research Verbund

Organization of the BASF Group

− Six segments contain 15 divisions that manage our global and regional business units − Regional divisions optimize the infrastructure and support operations − Corporate divisions and departments as well as competence centers provide Group-wide services

An aerial shot of BASF’s site in Freeport, Texas, which employs nearly 700 employees who support more than 50 community organizations.

The BASF Group



Report 2011The BASF Group The BASF Group

BASF aims to strengthen its position as the world’s leading chemical company. We describe how we intend to achieve this in our “We create chemistry” strategy, which we presented in November 2011. This strategy builds on our success in recent years and defines ambitious goals for the future.

Our purpose

We create chemistryfor a sustainable futureWe combine economic success, social responsibility and environmental protection. Through science and innovation, we enable our customers in almost all industries to meet the current and future needs of society.

Our position as the leading chemical company opens up unique opportunities for us to contribute to a sustainable future. We act in accordance with four strategic principles.

Our strategic principles

We add value as one companyOur Verbund system is unique in the industry. We plan to strengthen this sophisticated and profitable

system even further. It extends from the Production Verbund and Technology Verbund to the Know-How Verbund, and provides access to all relevant customer industries worldwide. In this way, we combine our strengths and add value as one company.

We innovate to make our customers more successfulWe want to focus our business even more strongly

on our customers’ needs and contribute to their success with innovative and sustainable solutions. In doing so, the focus of innovation is shifting from individual chemicals to customized products, functionalized materials and system solutions. Through close partnerships with customers and research insti-tutes, we link expertise in chemistry, biology, physics, materials sciences and engineering to create new solutions.

We drive sustainable solutionsIn the future, sustainability will increasingly become a starting point for new business opportunities.

We therefore value sustainability and innovation as important drivers for profitable growth.

We form the best teamCommitted and qualified employees around the world are the key to making our contribution to a sus-

tainable future. That is why we will continue to pursue our goal of building the best team. We offer excellent working conditions and an open leadership culture that fosters mutual trust and respect and encourages high motivation.

Our values

In developing the “We create chemistry” strategy, we have also defined our values more precisely. It is important that each and every member of the BASF team understands our corporate values and acts accordingly. This is because our values are an integral part of bringing our purpose as a company to life: “We create chemistry for a sustainable future.” They guide how we interact with society, with our partners and with each other.

CreativeIn order to find innovative and sustainable solutions, we have the courage to pursue bold ideas. We bring together our know-how in many different fields and build partnerships to de-velop creative, value-adding solutions. We also constantly work to improve our products, services and solutions.

OpenWe value diversity – in people, opinions and experience. That is why we foster dialog based on honesty, respect and mutual trust. We continually explore our talents and capabilities.

ResponsibleWe act responsibly as an integral part of society, strictly ad- hering to our compliance standards. And we never compromise on safety.

EntrepreneurialWe all contribute to BASF’s success, as individuals and as a team. BASF turns market needs into customer solutions. We succeed in this because we take ownership and embrace accountability for our work.

For more on the BASF strategy, see basf.com/strategy and the BASF Report 2011, pages 16 – 19.

The BASF GroupStrategy and values

Employees and society

2020 GoalsStatus at

year-end 2011

Occupational safety

Lost time injury rate per million working hours (baseline 2002) –80% –42.0%

Health protection

Health Performance Index (annual goal) >0.9 0.86

Executives Long-term GoalsStatus at

year-end 2011

International proportion of senior executives Increase in the proportion of non-German senior executives (baseline 2003: 30%) 33.0%

Senior executives with international experience Proportion of senior executives with international experience over 70% 79.7%

Women in executive positions Increase in the proportion of female executives worldwide 16.2%

Employees Long-term Goal

Personnel developmentEstablish a common understanding that personnel development is a responsibility shared by employees and managers and develop related processes and tools

Implementation has started in all

regions

The BASF GroupOur goals

Economic goals1

Annual Goals 2015 Goals 2020 Goals Status at year-end 2011

Growth Sales of approx. €85 billion Sales of approx. €115 billion Sales of €73.5 billion

Profitability We earn a premium on our cost of capital of at least €2.5 billion on average per year

We earned a premium of €2.6 billion on our cost of capital

EBITDA of approx. €15 billion Doubling EBITDA compared with 2010 to approx. €23 billion

EBITDA of €12 billion

Earnings per share of around €7.50 Earnings per share of €6.74

1 Our goals are based on the assumptions that we will continue to grow two percentage points faster than global chemical production annually and that global gross domestic product will grow by an average of 3% every year until 2020 and worldwide chemical production by 4% every year.

Environment, safety and product stewardship

2020 GoalsStatus at

year-end 2011

Energy and climate protection

Emissions of greenhouse gases per metric ton of sales product2 (baseline 2002) –40% –34.6%

Improvement of energy efficiency in production processes2 (baseline 2002) +35% +26.2%

Stop the flaring of associated gas that is released during crude oil production by Wintershall (2012 Goal) 100% >95%

Reduction in emissions from BASF operations (excluding Oil & Gas)

Emissions of air pollutants2 (baseline 2002) –70% –60.5%

Emissions to water3 of organic substances (baseline 2002) –80% –73.5%

Abstraction of drinking water for production (baseline 2010) –50% –20.9%

Introduction of sustainable water management at production sites in water stress areas 100% 2.0%

Transportation safety

Transportation accidents (baseline 2003) –70% –67.9%

Product stewardship

Risk assessment for all products sold worldwide by BASF in quantities of more than one metric ton per year >99% 29.5%

2 Excluding oil and gas production3 Assuming comparable product portfolio



Report 2011The BASF Group The BASF Group

Regional centers Verbund sitesSelected production sites Most important research sitesR

Nanjing

FreeportGeismar

Kuantan

Antwerp

Florham Park

São Paulo

Singapore

Hong Kong

Ludwigshafen

RR

R

R

R

R

R

R

R

R

R


Nanjing

FreeportGeismar

Kuantan

Antwerp

Florham Park

São Paulo

Singapore

Hong Kong

Ludwigshafen

RR

R

R

R

R

R

R

R

R

R

Europe

In 2011, companies headquartered in Europe recorded a significant increase in sales compared with the previous year: Sales rose by 17% to reach €41,036 million. Income from operations amounted to €5,668 million, an improvement of 9% compared with the previous year. This was mainly due to good earnings in the chemicals business as well as to gains on the disposal of our styrenics activities.

Asia Pacific

In Asia Pacific, we were able to exceed the sales level of therecord year 2010. Thanks to the full-year inclusion of the acquired Cognis businesses, the startup of new plants, and higher price levels, sales of companies based in this region rose by 14% to €13,316 million. However, income from operations declined by €138 million to €1,133 million due to increased raw material costs and weakening demand in the second half of the year.

BASF in the RegionsSales 2011: €73,497 million; EBIT 2011: €8,586 million

North America

Companies headquartered in North America increased sales by 11% to €14,727 million compared with the previous year. In local currency terms, sales rose by 17%. Sales exceeded the previous year’s levels in nearly all segments. We posted record income from operations, which rose by €207 million to €1,314 million thanks mainly to higher prices.

South America, Africa, Middle East

In a favorable market environment, sales by companies in the region significantly exceeded the level of the previous year, increasing by 15% to €4,418 million. In local currency terms, sales were 19% higher than 2010. Income from operations increased by €294 million to €471 million due to our strong business in South America.

North AmericaSales1 (in million €) EBIT (in million €) Employees2

14,727 1,314 16,167

Regional centers

Selected production sites

Verbund sitesR Most important research sites

South America, Africa, Middle EastSales1 (in million €) EBIT (in million €) Employees2

4,418 471 6,968

Around 111,000 employees work in the BASF Group, helping our customers from nearly all sectors and almost every country in the world to be more successful. We operate six Verbund sites as well as approximately 370 additional production sites worldwide.

EuropeSales1 (in million €) EBIT (in million €) Employees2

41,036 5,668 70,664

Asia PacificSales1 (in million €) EBIT (in million €) Employees2

13,316 1,133 17,342 1 In 2011, by location of company2 At year-end 2011



Report 2011


Nanjing

FreeportGeismar

Kuantan

Antwerp

Florham Park

Singapore

Hong Kong

Ludwigshafen

RR

R

R

R

R

R

R

R

R

BASF in North AmericaBASF in North America8

BASF in North America, headquartered in Florham Park, New Jersey, is among the largest producers and marketers of chemicals and related products in North America, which encompasses the United States, Canada, Mexico, Central America and the Caribbean. Five of BASF’s six business segments operate in North America: Chemicals, Plastics, Functional Solutions, Performance Products and Agricultural Solutions; Oil & Gas is not active in the region. Key industries served include chemicals, automotive, agriculture, construction, personal care, health and nutrition and packaging. The company has nearly 100 production sites and 20 research and development sites. It operates Verbund sites with integrated production in Geismar, Louisiana and Freeport, Texas.

Snapshot of major sites in North America:

Geismar, Louisiana…is BASF’s largest manufacturing site in North America. The Geismar Verbund site manufactures basic and specialty chemicals, intermediates and polyurethanes. Operations at the new methylamines plant began in 2011.

Freeport, Texas…is where BASF is a leading producer of basic chemicals, intermediates and fiber intermediates. Founded in 1958 as BASF’s first manufacturing site outside of Europe, the Freeport Verbund site is the second largest in North America.

Port Arthur, Texas…is home to BASF FINA Petrochemicals LLP, a $1 billion, 60-40 joint venture between BASF Corporation and Total Petrochemi-cals USA that operates one of the world’s largest naphtha steam crackers. Sabina Petrochemicals LLC, a joint venture between BASF Corporation and Total Petrochemicals USA, Inc., operates a world-scale C4 olefins complex adjacent to the steam cracker.

Iselin, New Jersey…is headquarters to BASF Catalysts, a world leader in environmental and process catalysts, and home of the division’s principal North American R&D facility. The newly formed Battery Materials business is also located here.

Research Triangle Park, North Carolina….is home of the BASF Agricultural Products Center, which includes BASF Agricultural Products North American Division, BASF Plant Science LLC, BASF Global Insecticide Research, and BASF Global Agricultural Research & Development.

Tarrytown, New York…is a major R&D hub for BASF in North America with exceptional expertise ranging from light stabilizers to bioactive and effect materials, personal care, nutrition and pharmaceutical ingredients.

Wyandotte, Michigan…is the site that manufactures urethanes and specialty plastics for the automotive, furniture and electronic industries and has R&D and application laboratories.

Altamira, Mexico… is where dispersions, colorants and plastics are manufactured. BASF also operates an engineering plastics compounding plant at the site. In addition, the 50/50 Polioles joint venture with the Alfa Group, which produces expandable polystyrene, is also located in the Altamira site.

Windsor, Canada…is the site that manufactures automotive coatings, including basecoats and primers. In particular, the facility manufactures waterborne coatings. In 2010, the site completed a capacity expansion to produce BASF Automotive Refinish products to service the North American Automotive Refinish business.

BASF in North AmericaAt a glance

Ten year anniversary

In December 2011, BASF FINA Petrochemicals LP celebrated 10 years of operations. The site has produced more than 34 billion pounds of products that are essential chemical building blocks for many consumer and industrial goods.

Sites

Operations at BASF FINA Petrochemicals in Port Arthur, Texas, illuminated at night.

* Figures reflect sales by location of customer

Headquarters

Selected production sites

Verbund sitesR Most important research sites

USA

Costa Rica

Puerto Rico

Mexico

Domincan Rep.

Canada

Panama

USA

€12,042 million*

Mexico

€939 million*

Canada

€929 million*

Costa Rica, Dominican Rep., Panama, Puerto Rico

€84 million*



Report 2011BASF in Mexico BASF in Canada

BASF Group in Mexico, Central America and the Caribbean, headquartered in Mexico City, has more than 1,600 employees. Our largest facility in the region, located in Altamira, manufactures dispersions, colorants and styrenic plastics, and operates an engineering plastics compounding plant. Through a joint venture with the Alfa Group, called Polioles, we also have an expandable polystyrene plant in Altamira. Other key sites in Mexico include Puebla, which produces additives for lubricants and plastics; Tultitlán, which makes automotive coatings; and Ecatepec, which makes care chemicals. In addition, our Barrientos Cienega, Costa Rica, Panama and Dominican Republic facilities manufacture construction chemicals.

A growing manufacturing presence in the regionBASF’s manufacturing operations in Mexico, Central America and the Caribbean continue to grow. A new Construction Chemicals plant was inaugurated in Panama in February 2011, to serve the dynamic construction market in the region. A se-cond major project involves the transfer of an applications la-boratory to Mexico for BASF Coatings. The new facility repre-sents an investment of $10 million USD, and will add 35 positions to the labor force.

The importance of sustainable constructionDuring 2011, BASF began a major reconstruction project on its corporate office building in Mexico City. The building will achieve significant reductions in energy and water consumption – more than 30% – as well as reduced carbon dioxide emissions. As a result of these improvements, the office will be the first in Mexico to achieve LEED (Leadership in Energy & Environmental Design) certification in the retrofitted building category by the USGBC (U.S. Green Building Council). With a large portfolio of products that contribute to improved energy efficiency, BASF is targeting developers and builders that are participating in a special BASF project in Mexico. This initiative is driven by government mandates for sustainable building, including recently enacted legislation that encourages low-income housing developers to meet sustainable criteria in their projects, and makes “non-green” ones difficult to sell. The government is also providing incentives to help consumers acquire housing in developments built with materials with improved energy efficiency. The magnitude of this program is significant. There is a shortage of low-income housing in Mexico, where the population is growing by around 1% per year. Since 2000, more than 600,000 low-income houses have been built annually, and the plan is to continue at this rate.

A great place to workIn 2011, BASF’s Puebla site received certification for the second time as one of the Best Companies to Work for in Mexico with 500 to 5,000 employees. The process of analysis, evaluation and certification conducted for the development of the rankings by Great Place to Work® Institute is regarded as the most comprehensive worldwide. The ranking is the result of a rigorous process of analysis and assessment of the views of employees and the corporate culture that allows the organization to select Best Companies to Work®. BASF ranked 35th among 100 participants in 2011.

www.basf.com.mx

BASF in Mexico, Central America and the CaribbeanAt a glance

Sustainable building in Mexico

Demonstrating our commitment to sustainable construction, BASF’s corporate building in Mexico City was retrofitted to generate lower consumption of energy and non-renewable resources. It will receive LEED certification by the USGBC.

BASF in CanadaAt a glance

BASF’s new, energy-efficient corporate office building in Mexico City. BASF Canada President Laurent Tainturier.

BASF Canada employs approximately 600 people at its Mississauga, Ontario, headquarters, manufacturing facilities and sales sites in most provinces. BASF Canada’s portfolio includes agricultural solutions, chemicals, plastics, performance products and functional solutions. A member of the Chemistry Industry Association of Canada, the company is dedicated to supporting customers’ success and to operating according to the principles of sustainable development.

RecognitionCascades, a customer that produces, converts and markets products that are comprised mainly of recycled fibers, awarded BASF with the Cascades Sustainable Supplier Award in January of 2012. This distinction, initiated by the Cascades Corporate Procurement Group, aims to recognize the efforts of suppliers who made a commitment towards sustainable development.

Building sustainabilityInnovative products such as WALLTITE Eco® spray applied polyurethane foam and Neopor® expandable polystyrene (EPS) enable BASF to support the Canadian building and construction industry with sustainable, energy-efficient materials. WALLTITE Eco has been used in several homes participating in the Canada Mortgage and Housing Corporation’s EQuilibrium™ (Net Zero Energy) Sustainable Housing Demonstration Initiative to meet stringent energy performance criteria, including Calgary’s Echo Haven Net Zero Energy Demonstration Home. Neopor EPS has helped BASF customer LOGIX®, an insulated concrete form (ICF) manufacturer, to win several awards. The ICF manufacturer was recognized at the annual ICF Builder Awards and Ontario Concrete Awards for its participation in the innovative Village Suites sustainable student housing project in Oshawa, Ontario, Canada. LOGIX won first place in the heavy construction category at the Sixth Annual ICF Builder Awards, and the mid- to high-rise residential category at the Ontario Concrete Awards.

RHEOMAX EDT TechnologyRHEOMAX EDT is an innovative technology helping the mining industry to efficiently and rapidly restore land previously used for mining to its natural state. Tailings are the waste material that results when oil sands are extracted through open-pit mining, which is done during a very water-intensive process, in which heavy oil (bitumen) is separated from the sand composite. Tailings are a mixture of water, fine clay, sand and residual bitumen that is deposited into tailings ponds. Returning a tailings pond to a landscape of vegetation and trees can take several decades, because the fine silts in the ponds settle to the bottom very slowly or can remain in suspension practically forever. With RHEOMAX EDT, the de-watering, recovery and recycling of tailings ponds can be greatly accelerated so that fewer and smaller tailings ponds are needed, with the ultimate goal of eliminating the need for them. The process, which can now be completed in just weeks or months, binds all the solid particles, fine and coarse, together in a homogeneous particulate structure that quickly and effectively releases the trapped water from the tailings. This recovered water is clean enough to be recycled back into the process while the solids are left to dry, compact and can begin supporting growth of vegetation in a matter of weeks.

In the communityBASF Canada and its employees support various organizations to enhance the communities in which we operate, our environment, and almost every aspect of society. For example, Crop Protection employees participated in the annual Royal Agricultural Winter Fair to help increase awareness and understanding of the plant science industry. BASF employees showcased products, fun agricultural facts and videos that addressed common questions about the industry to students, gro-wers and the general public at the CropLife Canada booth.

www.basf.ca

BASF presents innovation to MBA students

BASF Canada sponsored the John Molson MBA International Case Competition, the largest of its kind. Students from around the world presented real-life business challenges faced by major corporations. Laurent Tainturier, President of BASF Canada, helped decide the winning team. He also addressed BASF’s approach to innovation and sustainability.

BASF commemorates the opening of its retrofitted office building in front of a mural by students from La Esmeralda national school.



Report 2011BASF in North America BASF in North America

Open for business

BASF’s new headquarters in Florham Park, New Jersey, provides space for up to 1,400 employees. The 5-story building, constructed between August 2010 and May 2012, offers a contemporary architectural design to promote comfort and collaboration while minimizing the environmental footprint of the building.

New building dedication

BASF Corporation, business partners, state officials, community representatives and neighbors celebrated the official opening of BASF’s new North American headquarters building at a dedication event in May.

In April 2012, BASF opened a new North American headquarters building in Florham Park, New Jersey, to showcase its commitment to a sustainable future. The 325,000 square foot building, developed in partnership with the Rockefeller Group Development Corporation at The Green in Florham Park, is designed to achieve LEED®

double Platinum certification for both the interior and exterior. It features many BASF enabled construction solutions and is one of New Jersey’s largest sustainable buildings. The contemporary architectural design promotes comfort and collaboration while minimizing the environmental footprint of the building. The five story building can accommodate up to 1,400 people.

Sustainable design features Water Efficiency

− Indoor water usage is estimated to be reduced by at least 40% by using low-flow plumbing fixtures. − Landscape plan incorporates native and non-invasive plantings that require 85% less water to survive.

Site Development − More than 40% of the site will remain as open space. − Natural filtering and recharge of storm water achieves more than the 80% TSS (total suspended solids) removal rate.

Indoor Environment − Incorporates features to increase occupant satisfaction and well-being through better indoor air quality and lighting by:– Increasing ventilation 30% over conventionally designed

buildings and by using low to no off–gassing products– Using natural daylight to illuminate 75% of the interior and

90% of the space has access to a view of the outdoor en-vironment.

EnergyBuilding envelope design allows for at least 20% reduction in energy usage as compared to conventionally designed buildings. Strategy includes:

− High-efficiency mechanical equipment − Solar photovoltaic systems − Relatively transparent Low-E, high efficiency glass utilized to maximize connection to exterior without compromising energy efficiency. − Building oriented with the longest axis from east to west to minimize exposure from the sun while optimizing day lighting opportunities. − Vertical stone fins on east and west elevations held away from the glass to mitigate east/west sun exposure and horizontal louvers provided above the glass on the south elevation to mitigate southerly sun exposure.

Material Selection − At least 20% of the materials purchased for the project have recycled content, while at least 10% were purchased from local suppliers lessening the transportation impacts and benefiting the local economy. − At least 75% of the construction waste was diverted from landfills and recycled.

Sampling of BASF-enabled products in the building Exterior and building envelope:

− Elastospray® high-performance spray polyurethane foam roofing − FilterPave® porous pavement with BASF Elastopave® binder for water conservation − Green Sense® concrete for increased use of recycled content and strength − Sonneborn® joint sealants, low-VOC (volatile organic compound), durable, low-maintenance

Interior: − Basotect® acoustic insulation for increased occupant comfort − Natura® waterborne interior zero-VOC paint by Benjamin Moore®

− Emeco 111 Navy Chair® made with BASF Petra® post-consumer recycled polyethylene terephthalate (PET) plastic bottles − Shaw Contract Group® durable carpet with high recycled content

BASF’s Sustainable Headquarters in North AmericaInnovation and sustainability given form

Lobby in BASF‘s new headquarters building.

Cutting the ribbon to open the new headquarters.

Front view of BASF‘s new headquarters building.



Report 2011Our History

Since 1865, BASF has been shaping the future with chemistry and combining innovation with tradition. Chemistry is our strength. It makes us and our customers successful – today and in the future.

1865 - 1901Friedrich Engelhorn founds Badische Anilin- & Soda-Fabrik (BASF) to produce coal tar dyes. Soon thereafter, the company becomes a leader in the world dyes market with methylene blue, alizarin and indigo.

1902 - 1924The synthesis of ammonia by the Haber-Bosch process paves the way for the production of synthetic nitrogen fertilizers.

1925 - 1944Advances in high-pressure technology enable the production of synthetic gasoline and rubber, and products from acetylene. BASF joins IG Farbenindustrie AG and becomes enmeshed with the regime of the war years.

1945 - 1964Finally rebuilt after suffering severe damage during World War II, BASF is reestablished in 1952 as an independent company. North America: In 1958, BASF lays its U.S. foundation with The Dow Chemical Company, when they jointly establish Dow Badische Chemical Company in Freeport, Texas, producing basic chemicals and fiber products. Dow leaves the venture in 1978.

1965 - 1989North America: BASF acquires Wyandotte Chemicals Corporation based in Wyandotte, Michigan, strongly expanding its U.S. activities. In 1985, BASF buys Celanese’s fiber-composite materials business and purchases American Enka, doubling our fiber activities. The acquisition of Inmont represents a decisive step in developing the North American market for coatings and printing inks.

At the turn of 1985/86, our activities in North America are consolidated in BASF Corporation, a new Group company headquartered in New Jersey.

1990 - 2012North America: In 1995, BASF inaugurates its site in Altamira, Mexico, which initially produces dispersions, process chemicals, Styropor, and dyes. In 1997, the Korea-based KOHAP Group acquires our worldwide magnetic tape activities. We invented magnetic tape in 1933. In 2001, BASF Corporation and Dallas-based FINA Inc. start the world’s largest naphtha steamcracker in Port Arthur, Texas. The facility pipes propylene and ethylene, as well as other feedstocks to BASF’s Verbund sites in Freeport, Texas and Geismar, Louisiana. In 2006, the acquisition of Engelhard Corporation, the leading supplier of materials for catalysis and surface finishing, is the largest takeover in BASF’s corporate history. BASF also acquires the worldwide construction chemicals business of Degussa AG; and Johnson Polymer B.V., a specialist in resins. With the acquisition of Ciba in 2009 and Cognis in 2010, BASF further expands its portfolio. In January 2012, we announced the relocation of our plant biotechnology activities from Limburgerhof, Germany to Raleigh, North Carolina, marking North America as the new global headquarters for BASF Plant Science. In April 2012, BASF officially opened its new North American headquarters in Florham Park, New Jersey. Designed to achieve LEED® double Platinum* certification, it features many BASF enabled construction solutions and is one of New Jersey’s largest sustainable buildings.

www.basf.com/history

www.basf.com

Our HistoryA brief look

Future outlook in North America

Investment in North America will continue to grow. The company aims to increase sales in the region by about five percent per year through 2020, driven by strategic capital investments, sustainability-enabling innovations, and optimization of the company’s portfolio through acquisitions.

Employees at BASF’s new headquarters building can more easily network and collaborate with colleagues and even conduct meetings outside with access to wireless connectivity and SMART Board® technology.



Report 2011Strategic Areas Strategic Areas

In 2050, around nine billion people will live on this planet. On the one hand, this population growth is associated with enormous global challenges but we also see many opportunities, especially for the chemical industry. We expect the chemical industry to grow particularly strongly in the emerging economies, and that these markets will account for around 60% of global chemical production by 2020. Innovations based on chemistry will play a key role in three areas in particular:

Resources, environment and climateDramatically rising energy demand is one of the world’s most pressing challenges. In addition, access to clean water and other non-renewable resources is becoming increasingly important.

Food and nutritionA growing world population obviously needs correspondingly more food. And it will be necessary to enhance nutrition quality.

Quality of lifePopulation growth and globalization present further challenges. Aspirations differ greatly from region to region and among different social groups, but there is a common ambition: people want to improve their individual quality of life. BASF’s products and solutions will contribute to conserving resources, ensuring healthy food and nutrition, and improving quality of life. Sustainability and innovation will be significant driving forces.

Strategic AreasOverview

We create chemistry for a sustainable future

We combine economic success, social responsibility and environmental protection. Through science and innovation, we enable our customers in almost all industries to meet the current and future needs of society.

In times of climate change, limited resources and urbanization, how can we design the future of mobility? As the largest automotive supplier in the chemical industry, BASF helps to find entirely new solutions – for example, in the area of electric mobility. This is what the smart forvision concept car represents, which we presented together with Daimler in 2011. It offers a look at the future of electric mobility.

Five world firsts are realized in the smart forvision: the first all-plastic wheel rims suitable for large-scale production, innovative high-performance insulation materials and infrared reflective film for the windows as well as transparent organic solar cells and light-emitting diodes in the roof. All of these innovations stem from the areas of lightweight design, heat management and energy efficiency. By focusing on these key areas, the makers of the concept car demonstrate that features other than the drive system can also contribute to considerably increasing an electric vehicle’s range.

Plastic wheels reduce weightIn terms of lightweight design for the smart forvision, BASF developed the world’s first all-plastic wheel rim suitable for large-scale production using a novel high-performance material. The new plastic contains long reinforcing fibers made of glass, which improve its mechanical properties: The wheel rim is characterized by excellent thermal and chemical resistance, dynamic stability, toughness and good long-term durability. In addition, it reduces the smart forvision’s weight by three kilograms per wheel, thus decreasing energy consumption and increasing driving range.

Heat and cold: no admittanceThe infrared reflective film and high-performance insulation foams are also worldwide firsts. Both innovations support heat

management in the vehicle. Applied to the windshield and side windows, the metal-free film helps keep the interior from hea-ting up; it effectively reflects the infrared rays that cause heat build-up when the car sits in the sun. Unlike the metal-coated films being applied in some vehicles today, the transparent polymer-based film in the smart forvision only reflects the sun’s infrared rays and is still permeable for radio waves, such as those needed to operate a mobile phone. The innovative high-performance insulation foams are built into the car’s body. They are highly efficient even in thin layers and can be fitted everywhere in the vehicle. High-performance insulation foams ensure a pleasant interior temperature in both summer and winter.

Solar roof provides light and energyThe transparent organic solar cells and OLEDs in the roof improve energy efficiency: The solar cells create enough electricity to power the multimedia system and the fans, even in dim light. If the vehicle is sitting in the sun, the ventilation is operated with the help of the solar cells, keeping the car comfortably cool. OLEDs (organic light-emitting diodes) are placed below the solar cells. When the door is opened or a button is pushed, they illuminate the vehicle interior, using less than half the energy of a conventional energy-saving lamp. When switched off, these transparent lights afford a clear view of the outside. This results in a glass roof effect during the daytime. With consistent lightweight construction, intelligent heat management and maximum energy efficiency, it is possible to increase the smart forvision’s range by around 20%. And the best part: All the innovations presented in the smart forvision are also applicable for conventional drive systems, such as gas or diesel engines.

www.smartforvision.basf.com

Resources, environment and climateEnergy efficiency through chemistry

Smart driving

Automotive design innovations achieved through chemistry that make a car lighter, improve temperature management and increase energy efficiency can all be found in the smart forvision concept car BASF developed with Daimler. The car offers a glimpse into the future of mobility.

Resources, environment and climate

Food and nutrition

Quality of life



Report 2011Strategic Areas Strategic Areas

Global consumption of water has increased tenfold over the last 100 years. Access to clean water is among the major challenges facing mankind. With our chemistry, we want to contribute to innovative solutions to close the water supply gap and be a leading provider of chemical solutions for water recycling and reuse, water savings and drinking water treatment.

Innovative water treatment solutionsClean water is vital for survival. About one billion people globally have no access to safe drinking water, and 2.6 billion people lack adequate sanitation. As a result, the World Health Organization estimates that 3.4 million people, mostly children, die every year from water-related diseases. Many of these water-based challenges can be addressed with appropriate water treatment products and solutions. BASF offers a number of solutions ranging from process chemicals and water treatment facilities to modern membrane materials. In 2011, we added Multibore® membrane technology to our portfolio with the acquisition of inge watertechnologies AG. This technology reliably filters out particles and micro- organisms such as bacteria and viruses from water, supplying consistently high quality. Multibore membranes can help to purify drinking water as well as treat process water, wastewater and sea water. BASF also produces highly efficient chemicals specifically designed for industry. Products under the Zetag® brand, such as specialty cationic high molecular weight flocculants in liquid and powder form, assist to remove contaminated solids from waste water coming from production sites before it is discharged into rivers and oceans. Without such chemicals, industry will face major challenges to meet the wastewater discharge standards and minimize the impact on water quality and the environment.

Smartphone, tablet computer, notebook or LCD screen – many people would find it hard to imagine life without these sophisticated devices. Manufacturing such com-plex electronic devices requires the use of very high performance individual components. BASF’s products and solutions make a significant contribution toward their development and production.

Display screens of the futureDisplay screens are made of numerous tiny pixels in red, green and blue. In order for our eyes to be able to perceive these colors, we first need light. BASF is involved in the development of a technology that revolutionizes light generation, paving the way for new applications. The organic light-emitting diode, or OLED, based on organic semiconductor materials, offers up one astounding property that other light sources do not: full-surface light. While light bulbs and LEDs (light-emitting diodes) create points of light that blind the eye when looked at directly, the flat, soft light of OLEDs opens up entirely new possibilities in light source design. Incorporated into display screens, for example, OLEDs enable a significantly thinner and more flexible construction style. The composition of an OLED display is considerably simpler than today’s standard liquid-crystal display (LCD). Furthermore, the self-illuminating color pixels in OLED displays create a brilliance in color and contrast that makes pictures even more lifelike. Compared with conventional energy-saving lamps, OLEDs use less than half as much electricity and enable more energy-efficient and thus longer-lasting light appli-cations at lower cost.

Less water can yield more in agricultureTechnology in agriculture can help save water – either directly through better irrigation systems or by planting crops that require less water, or indirectly via yield-increasing products and methods. BASF’s Agricultural Solutions team is working on different projects and products designed to optimize water use. For example, the product AgCelence® fungicide promotes overall plant health, but also leads to higher plant yields espe-cially under water-stress conditions. With AgCelence, farmers benefit from improved water use efficiency and their crops have a better chance of withstanding any prolonged dry spells.

BASF’s water management goalsIn addition to developing products for improving water quality and water use efficiency, BASF focuses on water conservation in its own manufacturing processes. By 2020, we want to reduce the use of drinking water in production processes by half compared with 2010. We also show our commitment to sustainable water use in international partnerships and initi-atives. BASF played a significant role in the development of the European Water Stewardship standard, a voluntary industry standard. Starting in 2012, we will introduce this standard globally at production sites located in water stress areas.

www.basf.com/water

Home cinemaPigments also play an important role in improving screen picture quality. The red pigments in LCD flat screens determine, for example, the image’s contrast ratio, brightness and color purity. Since the market continues to grow and is constantly changing, innovations are in demand. BASF delivers them with the pigments in its Irgaphor® Red product line, which have been continually improved since their market launch. The newest generation, Irgaphor® Red S 3620 CF, represents optimal contrast ratio and high heat resistance. In addition, we are working on increasing the brightness of our pigments even more – because the brighter a pigment is, the less background light the screen requires. This can decrease energy consumption in televisions and prolong battery life in mobile devices.

Steady voltage for processorsWhat about power for electronic devices? Some components, like the CPU or hard disk, need current with a particular voltage. Voltage deviating from the required value damages these components. High-purity carbonyl iron powder (CIP) from BASF contributes decisively to solving this problem: Incorporated into the cores of high frequency coils, it ensures that the current flowing into sensitive electronics always has exactly the required voltage. CIP’s even texture and spherical form facilitates an electrically insulated coating, suppressing additional current flows in the coil core. Every tablet computer contains three or four high-frequency coils with a CIP core – a notebook has as many as ten.

www.basf.com/displays

www.basf.com/red_pigments

www.basf.com/carbonyl_iron_powder

Food and nutritionSecuring water supplies for the future

Quality of lifeInnovations for new technologies

BASF is committed to the responsible use of water.

Clean water

Today the amount of water used worldwide is around 10 times higher than the level 100 years ago, and access to clean water is a challenge for many people. In response to the increasing pressure on water supply arising from economic growth and rising population, BASF is providing innovative chemical solutions for sustainable water treatment for both municipal and industrial sectors.

Enhancing the experience

BASF is enabling a more satisfying consumer experience with technology. Its advanced products and solutions for various devices are contributing to better lightness and brightness qualities, prolonging user interaction, ensuring the right electricity flow, and at the same time saving energy.



Report 2011Innovation Innovation

Investment in North AmericaIn addition to internal R&D assets, BASF is making significant investments through BASF Future Business GmbH and BASF Venture Capital. Many of these investments are being made in North America. BASF Future Business identifies new business opportunities and develops the required market strategies to drive innovative system solutions in the growth areas important for BASF and its customers. The Future Business team opens up new business opportunities for BASF such as collaboration in the field of antimicrobial coatings for catheters and other minimally invasive medical devices with Medi-Solve Coatings LLC. This collaboration combines Medi-Solve’s proprietary AquaCoat® coating technology with BASF Future Business’ proprietary HyGentic® silver- based antimicrobial additive platform. Medical device manufacturers will benefit from the enhanced safety and performance of these customized multi-functional coating solutions developed through this collaboration. BASF Venture Capital invests capital in start-up companies that specialize in innovative chemistry and system solutions in BASF‘s growth and technology fields. The company recently invested in Renmatix Inc., which has developed a patented process known as the Plantrose™ platform. Through this process, industrial sugar can be produced from lignocellulosic biomass (wood, cane trash or straw) and can be used, for example, to produce biofuels or basic chemical products and intermediates by fermentative processes.

Research CentersThere are four major R&D sites in the United States: Wyandotte, Michigan; Tarrytown, New York; Iselin, New Jersey; and Research Triangle Park, North Carolina. The R&D and application laboratories in Wyandotte, Michigan, provide cutting edge solutions for the automotive, construction and many other industries. The site is also home of BASF‘s North American application labs for Engineering Plastics, Polyurethanes, Home Care, Printing & Packaging and Industrial Coatings.

The Tarrytown Research Center has become a major R&D hub for BASF in North America. BASF recently opened a new white biotechnology and microbiology research center in Tarrytown, where biologists and biotechnologists will work to develop more efficient biotechnological production processes and develop new antimicrobial products for medical technology, hygiene and health care. BASF Catalysts, headquartered in Iselin, New Jersey, along with the division‘s principal North American R&D facility, is the world’s leading supplier of environmental and process catalysts. BASF Catalysts offers expertise in the development of technologies that protect the air we breathe, produce the fuels that power our world and ensure efficient production of a wide variety of chemicals, plastics and other products. The BASF site in Research Triangle Park (RTP), North Carolina, is home of the BASF Agricultural Products Center (APC). The APC is headquarters for the BASF Agricultural Products North American Division, BASF Plant Science LLC, BASF Global Insecticide Research, and BASF Global Agricultural Research & Development. In January, BASF announced that it is concentrating its plant biotechnology activities on the markets in North and South America. The headquarters of BASF Plant Science will be moved from Limburgerhof, Germany, to RTP, North Carolina, to reflect this change. In February, we announced an investment to expand our facilities in RTP. Nearly 80,000 sq. ft. of office, laboratory and greenhouse facilities will support the company’s plant biotechnology and insect control research.

Biodegradable plastics patentBASF received a license from Metabolix, Inc. under the U.S. patent titled “Polylactic Acid-Based Blends,” to produce and market PLA and PBAT compounds under the BASF trade name Ecovio®. Ecovio biodegradable polymer is a blend of Ecoflex® biodegradable aliphatic-aromatic copolyester and polylactic acid on the basis of corn. The University of Massachusetts is the owner of the ‘199 patent, and Metabolix is its exclusive licensee in the relevant field. Metabolix is a leader in the use of

Innovation

− Around 10,100 research and development employees worldwide − Research pipeline with around 2,800 projects − €1,605 million in research and development expenditures in 2011

Expenditure on research and development by segment

BASF focuses research and development (R&D) on market and customer industries, to utilize growth and technology areas to address social challenges. Based on our “We create chemistry” strategy, this orientation helps BASF intensify its focus on sustainability and innovation to drive future business growth in North America.

BASF has a long history of significant innovations. Our technologies play an important role in helping improve people’s quality of life, as well as environmental and resource conservation. One example is Green Sense Concrete mixture, which is being used to build two high-strength columns in the construction of One World Trade Center in New York. Another example is the smart forvision car, a concept car developed by Daimler in collaboration with BASF. The smart forvision car combines a futuristic design with technologies for lightweight design, temperature management and energy efficiency. In 2011, we invested nearly €1.61 billion in R&D projects; for the coming year, that investment will grow to €1.7 billion. BASF has more than 10,100 employees at numerous research sites worldwide, often working together closely with important international research institutes, customers and other partners. In North America, there are approximately 1,500 people focused on R&D. BASF has embarked on more than 150 research collaborations with universities and 27 national labs in North America. According to the U.S. News and World Report1 ranking of the top 25 graduate schools for chemistry, BASF works or has recently worked with 24 out the top 25. These collaborations are not only helping to find answers to global challenges, but enabling BASF to recruit top talent to ensure a sustainable workforce.

Collaboration: Joint efforts fuel innovationThrough the BASF Advanced Research Initiative at Harvard University, BASF and the Harvard School of Engineering and Applied Sciences (SEAS) co-hosted a two-day symposium on pharmaceutical nanoformulations. The event attracted more than 200 leading experts in chemistry, applied physics, materials

science, and pharmaceutical science to the American Academy of Arts and Sciences in Cambridge in November 2011. The purpose of the symposium was to discuss the challenges of modern medicine and the search for innovative solutions using nanotechnology. BASF Plant Science and Cargill are co-developing a new dietary source of EPA/DHA that will make it easier for consumers globally to achieve optimal intakes of EPA- and DHA-rich omega-3 polyunsaturated fatty acids. Although research is ongoing, a growing body of scientific evidence links dietary intake of omega-3 fatty acids with benefits for heart and brain health. However, humans on average are currently not consuming enough of these healthy fatty acids. This next generation canola oil containing EPA/DHA will enable food, pharmaceutical and nutritional supplement manufacturers to deliver the potential health benefits of omega-3 fatty acids in a wide variety of new, cost-effective consumer products available by the end of the decade.

BASF’s InnovationsResearch & development helping to shape a sustainable future

1 U.S. News and World Report; Graduate Schools, Chemistry, Rankings; http://grad-schools.usnews.rankingsandreviews.com/best-graduate-schools/top-chemistry-schools/rankings/

Nano meets pharma

Particles of an inorganic carrier material are just nanometers in size and protect the molecules of organic-pharmaceutical active ingredients. These complex, poorly soluble molecules can be more easily absorbed by the human body thanks to a new process developed through the BASF Advanced Research Initiative at Harvard University.

BASF employee John Foley tests a beverage formulation at the R&D Center in Tarrytown, New York.

1 Chemicals

2 Plastics

3 Performance Products

4 Functional Solutions

5 Agricultural Solutions

6 Oil & Gas

7 Corporate research, Other

8%

9%

21%

12%

26%

1%

23%

1

2

3

4

5

6

7

€1,605million

Magnified nanoformulation.



Report 2011Innovation name of chapter

bioscience to provide bio-based, sustainable solutions to address the world‘s needs for plastics, fuels and chemicals. Ecovio can be used to extrude biodegradable films without any further admixtures or preparation and is used to create tailor-made blends to meet customer needs. BASF SE owns intellectual property for Ecoflex biodegra-dable aliphatic-aromatic copolyester in all regions of the world. Further details of the patent agreement are undisclosed.

New technology for the rail industryAs a global platform to support the rail sector and its customers, BASF launched new technology that is helping change how the rail industry addresses maintenance and expansion challenges. The company introduced four new technology solutions to support the global rail industry — Elastotrack®, Elastollan®, Elastocoat® and Elasturan® rail solutions. The benefits of these rail solutions include reduced maintenance costs, reduced potential for derailments, improved environmental performance, and a quieter, more comfortable ride for passengers.

Building and construction developmentsFor the building and construction industry, BASF developed MV-Block, a moisture mitigation and surface consolidation solution that joins the complete line of Chemrex® Flooring Installation Systems as an enabler to improve efficiencies while lowering overall installation costs. MV-Block was engineered for application over concrete substrates and features rapid curing to improve installation time and process throughput. It is a high-build epoxy coating that bonds aggressively to concrete while providing a superior moisture vapor block for safe flooring installations. BASF also introduced the first latex for carpet backing adhesives to be made with a minimum of 10% renewable materials. STYROFAN ECO 4810 will enable carpet manufacturers to develop new, sustainable products with ingredients that reduce energy and resource consumption, compared to alternative materials. BASF’s test data indicates that STYROFAN ECO 4810 latex achieves key product performance levels targeted by both residential and commercial

carpet manufacturers. The use of carpet with STYROFAN ECO 4810 latex will also contribute towards Leadership in Energy and Environmental Design (LEED) points for builders and contractors.

2011 recognitionTo mark the 10th anniversary of an academic-government-indus-try research partnership dedicated to developing environmentally friendly routes to polymers, the Center for Biocatalysis and Bio-processing of Macromolecules at Polytechnic Institute of New York University (NYU-Poly) presented a plaque to BASF for its steady presence and collaboration in the Center’s research. The center’s research is supported by the National Science Foundation and private industry. BASF scientists have provided vital input on the center’s ability to create new polymers by using biocatalytic, or enzyme, reactions that provide an environmentally safer alterna-tive to conventional chemical routes. For the eighth time in 10 years, BASF received General Motors’ Supplier of the Year Award. GM’s Supplier of the Year program began in 1992, and each year a global team of purchasing, engineering, quality, manufacturing and logistics executives determine the winners of the Supplier of the Year Award. BASF’s Coatings Division recently introduced the environmentally friendly CathoGuard® 800 and 900 product line – a Cathodic e-coating system that provides the base for perfect automotive surfaces and protects edges and cavities from corrosion. BASF was named as one of two recipients of Cascades’ sustainable supplier award. The use of BASF’s LUREDUR® product in Cascades’ Norampac’s production plants for container board enabled the Canadian company to increase productivity and reduce the basic weight of their products and the amount of energy required to manufacture them.

New plastic for biodegradable mulch film

Mulch film made from BASF’s new biodegradable Ecovio® F Mulch plastic grade promotes growth of agricultural products just as well as conventional polyethylene film. After the harvest, however, Ecovio film can be simply plowed under, while conventional film must be collected at great effort and disposed of, resulting in time and cost savings.

The BASF Innovation Center in Florham Park, New Jersey, is an interactive demonstration of the company’s commitment to creating chemistry for a sustainable future.



Report 2011Sustainable Development Sustainable Development

At BASF, we view chemistry as an enabler for innovation and sustainability to address the continually increasing needs for key resources such as energy, clean water and food as our world population continues to grow. We aim to drive sustainable solutions that combine economic suc-cess, social responsibility and environmental protection by working with key stakeholders in North America and continually developing sustainability tools and expertise in the region.

Driving sustainable solutions with stakeholdersBASF was recognized for efforts in the automotive sector including the Society of Plastics Engineers powertrain award for Ultramid® used in the 2011 Chevrolet Volt battery pack, Toyota Motor Corporation’s “Technology and Development Award” together with Concept Industries for a jointly produced lightweight load floor composite using Elastopor®, a lightweight, poured-in-place BASF rigid polyurethane foam core, and Ford’s World Excellence Award for corporate responsibility. Additional innovative products included a polyamide 6 resin containing post consumer recycled content used in air intake manifolds, and a castor oil-based foam for instrument panels. In addition, BASF announced plans to further invest in electro-mobility by offering a broad portfolio of current and future technologies for use in both electric and hybrid electric vehicles. In building and construction, we demonstrated our commitment to continually improve our own facilities by signing the Manifesto for Energy Efficiency in Buildings established by the World Business Council for Sustainable Development (WBCSD) and developing a sustainability guideline for the management of our own office buildings. We also offer an array of products for the construction industry, such as more energy efficient insulation materials. In the consumer goods market, our efforts included continued participation in multi-stakeholder initiatives such as The Sustainability Consortium (TSC). TSC (www.sustainabilityconsortium.org) brings together more than 100 thought leaders from retail, consumer goods, academic,

Sustainable DevelopmentThe unique chemistry of a holistic approach

government and non-governmental organizations to drive a new generation of products and supply networks that address environmental, social and economic imperatives. One of BASF’s product offerings is Trilon® M, an alternative for phosphate in products such as automatic dishwashing detergents, which was approved by the Environmental Protection Agency’s Design for the Environment (DfE) certification program. It is the first product to meet the DfE criteria for chelating and sequestering agents, which were developed by chelating agent manufacturers, cleaning product formulators, non-government environmental organizations, certification groups, academia and industry associations.

Evolving sustainability expertise and toolsWe continued to develop sustainability expertise designed to support our value chains building on over 15 years of experience with Eco-Efficiency Analysis – a methodology that compares the economic benefits of a product to its impact on the environment throughout its entire life cycle – including raw materials extraction, use, and recycling, re-use or disposal. In 2011, we launched AgBalance™, a holistic method for life cycle assessment in agricultural and food value chain production processes. AgBalance received independent assurances from three global expert agencies: The TÜV SÜD, DNV Business Assurance and NSF International. We also launched the SELECT™ (Sustainability, Eco-Labeling and Environmental Certification Tracking) Eco-Label Manager, a database that enables understanding and management of the abundance of eco-labels, environmental claims, directories and ratings systems.

Global recognition and effortsBASF is the only industrial company worldwide to publish a comprehensive corporate carbon footprint since 2008. Based on continuously updated calculation methods, we report on greenhouse gases along our entire value-adding chain in accordance with the WRI Greenhouse Gas Protocol Standard, and are contributing expertise to a WBCSD project to establish a uniform interpretation of this standard for the chemical industry.

In 2011, we received an award from the Environmental Invest-ment Organization for our transparent reporting and compre-hensive data collection. For the second time in a row, BASF has been selected for inclusion in the Carbon Disclosure Leadership Index and the Carbon Performance Leadership Index – the only chemical company to receive this honor.

Sustainable Saturdays at Safeco Field On Earth Day weekend in April, the Seattle Mariners major league baseball club teamed up with BASF to kick off “Sustainable Saturdays”, a season-long program at Safeco Field to promote the kind of environmentally conscious practices that have earned the club the prized position of number one in energy efficiency and number two in recycling in Major League Baseball. The Seattle Mariners currently divert more than 80% of their waste stream away from landfills into composting and recycling centers. To inspire its fans to follow its lead and start striking out landfills at home, the first 10,000 fans that arrived at the ballpark received a free “Kitchen Catcher” compost kit, compliments of BASF, Ecosafe and Seattle Public Utilities. Inside were five compostable bags produced with BASF’s Ecovio® biodegradable polymers. In addition, at each of the 10 Sustainable Saturday games, at the end of the first inning, the public address announcer will invite fans to play the BASF Kid Compost Trivia Game and test their knowledge about sustainability at Safeco field and the Seattle area. Chris Bradlee, Market Development Manager for Biodegradable Polymers at BASF, threw out the first pitch at the inaugural “Sustainable Saturdays” game.

www.basf.us/sustainability

Sustainable development at BASF

For BASF, sustainability means aligning success with environmental and social responsibility. This will ensure our long-term business success. As The Chemical Company we meet this challenge. The strategic and organizational implementation of sustainability helps us identify risks at an early stage, innovate to help make our customers more successful and open up new business areas for BASF.

BASF sustainability services

BASF has developed a robust and leading-edge Tool Box for quantifying sustainability throughout the value chain. Our services include:

BASF’s Trilon® M is an alternative for phosphate in automatic dishwashing detergents.

A child with his Kitchen Catcher compost kit at Safeco Field during the Seattle Mariners’ first Sustainable Saturdays event.

— Sustainability check— Environmental impact analysis — Total cost of ownership— AgBalance™

— Eco-Efficiency Analysis — SEEBALANCE®

— SELECT™ Eco-Label Manager — S.E.T. Initiative



Report 2011Environment & Safety Environment & Safety

Environment & SafetyWe act responsibly as an integral part of society

BASF executives officially opening the new West Memphis, Arkansas, office building.

As a leader in an energy-intensive industry, our success depends on the long-term security of our energy and raw material supplies. That is why we have started a program to increase our energy efficiency – measured as the volume of sales products produced in relation to the energy required for their production – with the aforementioned global goal for our production processes. We pursue this goal through efficiency in energy generation, savings through our energy Verbund, and our energy management, which analyzes and further improves energy efficiency at our plants. In addition to focusing on the energy efficiency of our plants, we are also focusing on the sustainability of our administrative structures. In September, we officially opened a new energy efficient administration building in West Memphis, Arkansas. Some of the advanced features of the structure include an overall energy efficient building envelope that reduces heat loss and air leaks; the efficient use of daylight combined with daylight sensors and occupancy sensors that adjust lighting needs to conserve energy and the use of materials and systems that minimize the building’s impact on water consumption and reduce waste. Leadership in Energy and Environmental Design (LEED®) Silver certification is expected for the building. We use highly efficient combined heat and power (CHP) plants to generate our own energy. With this CHP technology, we can meet more than 70% of our electricity needs. In 2011, it allowed us to save more than 12 million MWh of fossil fuels compared to conventional methods of generating steam and electricity. We also are examining the use of renewable energy sources. These can only become a permanent part of our energy mix if they are competitive in terms of supply security and cost. We support the use and generation of renewable energies, and research and development technologies that can be used in fields such as wind and solar thermal energy. To advance electric mobility, BASF began construction in 2011 on the first facility for the large scale production of battery materials for electric vehicles in Elyria, Ohio.

Environmental protection, safety and security are impor-tant management responsibilities for BASF. Our Respon-sible Care Management System is the framework for the safe production and transport of products and regulates the conditions for the implementation of our voluntary commitments. Our top priorities are the safety of our em-ployees and neighbors and the security of our plants.

Climate protectionWe are committed to global climate protection. We make an im-portant contribution with our climate protection products and our efforts to further reduce emissions along our value-adding chain. One focus of our research and development is on conti-nuously improving the cost effectiveness of climate protection solutions. We measure our performance with a transparent cor-porate carbon footprint. In 2011, we set ourselves a new global goal for climate protection: By 2020, we want to lower emissi-ons per metric ton of sales product by 40% compared with 2002.

Emissions to airRegular monitoring of our emissions to air is a part of environ-mental management at BASF. In addition to greenhouse gases, we also measure emissions of other air pollutants. These include inorganic compounds such as carbon monoxide (CO), sulfur di-oxide (SO2), nitrogen oxide, ammonia and others, as well as dust, heavy metals and volatile organic compounds (NMVOCs). As our portfolio expands and production volumes increase, we remain committed to our goal of reducing the emission of air pollutants from our chemical plants. By 2020, we want to reduce absolute global emissions by 70% in comparison with 2002.

EnergyThe conservation of resources is one of our fundamental princip-les. We use efficient energy generation technologies, energy-effici-ent production processes and comprehensive energy manage-ment. We also make products that conserve resources. To continue to increase our energy efficiency, we have set ourselves a new glo-bal goal: By 2020, we want to improve the energy efficiency of our production processes by 35% compared with 2002.

Energy efficiency in West Memphis, Arkansas

BASF reaffirmed its commitment to the community and to sustainable development with the opening of a new energy efficient administration building in West Memphis, Arkansas, using construction materials and technologies – many of which are made possible through BASF chemistry.

8.6

2009 2.9

2.0

Air pollutants (wo CH4)

CO, NOX, NMVOC, SOX, dust, NH3 / other inorganic

(Metric tons)

13,000

2011 1,500

1,200

12,800

2010 1,300

1,300

12,300

2009 1,200

1,200

Electricity consumption (total)

(Million MWh)

3.4

2011 0.7

0.8

3.3

2010 0.7

0.8

3.1

2009 0.7

0.8

Steam consumption (total)

(Million metric tons)

12.9

2011 2.8

2.5

11.9

2010 2.6

2.4

10.9

2009 2.6

2.3

USA Geismar Freeport




Fuel consumption (total) – central power plants and boilers

(Million MWh)

10.2

2011 3.0

2.2

9.1

2010 2.6

2.2

Greenhouse gas emissions (total)

CO2, N2O, CH4, HFC, PFC, SF6

(Million metric tons of CO2 equivalents)

5.4

2011 0.8

1.0

5.0

2010 0.7

1.1

4.8

2009 0.8

1.0




WasteBASF prevents and reduces waste wherever possible. If no recovery options are available, we dispose of waste in a correct and environmentally responsible manner. We regularly carry out audits to inspect external waste management plants. When making acquisitions, we apply the same standards for the

WaterWe use water as a coolant, solvent and cleaning agent, and to produce our products. We want to use water as sparingly as possible at our sites, thus contributing to responsible water usage. Water quality and availability vary substantially from region to region; therefore, we have developed a custom designed water usage plan for each site. We have set ourselves two new global goals for 2020: we want to reduce the use of drinking water in production processes by half compared with 2010 and establish water management at all sites in areas of water stress. BASF also offers customers solutions that help them purify water, use it more efficiently and reduce pollution. The product range of BASF’s Water Solutions business includes products used in the key processes of municipal and industrial water treatment. In 2011, BASF used 89.0 million cubic meters (2010: 83.0 million cubic meters) of water in the United States, 22.2 million cubic meters (2010: 18.0 million cubic meters) at our Geismar facility and 8.3 million cubic meters (2010: 7.8 million cubic meters) at our Freeport facility. Of the water used in the United States, 41.9 million cubic meters (2010: 41.0 million cubic meters) were used for production (when water comes into contact with products). At Geismar, 2.9 million cubic meters (2010: 2.7 million cubic meters) were used for production, and in Freeport 2.6 million cubic meters (2010: 2.2 million cubic meters) were used. Of the water used at Geismar, 76% was drawn from rivers and lakes and 24% from groundwater; no drinking water was used. At Freeport, 99% of water used was abstracted from rivers and lakes. Drinking water accounted for the remaining 1%.

responsible handling of landfills and contaminated sites. After extensively planning, the remediation of two former multi-disposal landfills was largely completed in 2011. These were contaminated areas of former Ciba sites. In 2011, we generated 551,000 metric tons of waste in the United States. In Geismar and Freeport, the total amount of waste produced in 2011 was much lower than in 2010. In Geismar, 41,000 metric tons of waste were generated (2010: 49,000) and in Freeport it was 149,000 metric tons (2010: 163,000). We were able to recycle or thermally recover 12 % (2010: 14% of waste in the United States, and 20% (2010: 23%) and 16% (2010: 15%) of waste generated in Geismar and Freeport, respectively. At Geismar, 55% of the rest of the waste was disposed of by incineration and 25% was sent to a landfill in 2011. None of the remaining waste was stored underground. 34% of the rest of the waste at Freeport was disposed of by incineration, 19% was landfilled, and 31% was stored underground last year. BASF’s McIntosh, Alabama, site was the first place winner of the Gulf Coast Guardian Award for Partners for Environmental Progress. BASF’s McIntosh Site along with 11 other Mobile-area businesses joined forces in 2011 to reduce their environmental impact and improve sustainability while making a positive economic contribution to the region.

Occupational health and safety Our management systems for occupational safety and health protection are based on extensive preventative measures and the participation of all people at our sites. We promote and monitor safety at work through risk assessments, safety rules, seminars and audits. As part of our global safety initiative, we have improved our contractor management with measures for work organization and supervision. The Journey to Excellence program established in North America seven years ago has established a safety culture based in employee involvement, open communication/dialogue, visible leadership and acceptance of personal accountability for safety.

Global water goals

By 2020, we want to reduce the use of drinking water in production processes by half compared with 2010 and establish sustainable water management at all sites in areas of water stress. We also want to reduce emissions to water of organic substances and nitrogen by 80% and of heavy metals by 60% compared with baseline 2002.

*Starting in 2010, the amount of cooling water is substantially higher as the recirculation of water was accounted for.

Emissions to water (total) – Organic substances (COD)

(Metric tons)

4,000

2011 800

400

5,100

2010 1,100

400

4,100

2009 1,300

400

Emissions to water (total) – Nitrogen

(Metric tons)

660

2011 50

110

1,020

2010 110

110

1,180

2009 90

120

Water used for cooling (total)*

(Million cubic meters)

832.3

2011 15.0

435.3

844.0

2010 8.6

432.0

27.1

2009 8.6

5.1

Emissions to water (total) – Heavy Metals

(Metric tons)

3

2011 1

0

3

2010 0

0

4

2009 0

0




480,000

2009 36,000

139,000

Total amount of waste

(Metric tons)

551,000

2011 41,000

149,000

534,000

2010 49,000

163,000




Responsible Care ManagementBASF’s Responsible Care Management System (RCMS) addresses our voluntary commitment to the American Chemistry Council’s (ACC) Responsible Care® initiative. We have been a member of the ACC for 47 years. Our RCMS allows BASF to establish and implement the processes we use in North America to achieve compliance with regulatory and internal requirements for operating safe and environmentally sound facilities and manufacturing safe products. In meeting Responsible Care and sustainability commitments, RCMS creates a business advantage for our valued partners by driving continuous improvement in performance and increasing the efficiency and effectiveness of EHS-related activities.

Product stewardshipFor BASF, product stewardship does not end at the factory gates. We review the safety of our products along the entire value-adding chain – from our raw materials suppliers to our own production and finally to customers’ end use of our products. Our highest priority is to ensure that our products

To continuously improve our performance in terms of occupational safety and health protection, we have set ourselves ambitious global goals. For example, by 2020, we want to reduce our lost-time injury rate per million working hours by 80% worldwide, compared with 2002. To show BASF’s comprehensive health management even more accurately, we developed a new indicator in 2010: the Health Performance Index (HPI). This comprises five measureable components: reported cases of occupational diseases, medical emergency planning, first aid, preventive medicine and health promotion.

Last November, BASF Canada hosted employees from the Greater Toronto Area and the Milverton site in Ontario for a Safety by Choice Event. The President of BASF Canada, Laurent Tainturier, challenged employees to implement safe practices, not just at work, but in all facets of life. Since then the program has been re-launched for employees across Canada, inviting them to set monthly safety goals and track their progress.

pose no risk to people or the environment when used responsibly and in the manner intended. We ensure uniformly high standards for product stewardship worldwide, often going beyond legal requirements. We provide extensive information to our customers and the public on our chemical products with safety data sheets in more than 30 languages. Our emergency hotline network provides information around the clock. And, when appropriate, we train our customers in the safe use of our products, such as chemical intermediates or crop protection products. For the fifth year in a row, BASF’s Freeport site received the Texas Chemical Council award for Sustained Excellence in Caring for Texas. This award recognizes chemical manufacturers who demonstrate excellent performance in community awareness, emergency response and pollution prevention.

Process safety and emergency responseEnsuring safety and security is vital to protect our employees and neighbors as well as our property, products, processes, the environment and information. In designing our facilities, we use a five-step system of safety reviews to identify hazards, evaluate associated risks and identify necessary measures to prevent the release of materials and minimize the possibility of explosions and fires. BASF is taking strategic steps to reduce the number of incidents of releases with the goal of 50% reduction by 2015 (2010 baseline). With our emergency response concepts, we are prepared for potential incidents with specific emergency response plans for each of our production facilities. BASF’s 24-hour-a-day central emergency response center supports local emergency response units worldwide.

Chemical transportation safetyTransportation, distribution and warehouse safety also are essential parts of our operations. Our rules and measures for transportation safety include the delivery, storage and distribution of chemicals between all BASF sites, suppliers and customers. If an incident occurs despite all of our security measures worldwide, we provide swift and specially coordinated assistance. Our more than 150 transportation safety advisors are involved in these processes and procedures. They collaborate within a global network, helping us to establish proper measures and to avoid incidents in the future. We also regularly assess our logistics suppliers with regard to safety and quality. We assessed more than 500 companies around the world in 2011.

www.basf.com/sustainability

Good neighbors in Geismar

The Geismar, Louisiana, site is an active participant in Community Advisory Panels comprised of local citizens that discuss various topics such as safety, health and environmental protection with BASF personnel.

Global transportation safety

We aim to reduce the rate of transportation accidents worldwide per 10,000 shipments by 70% compared with 2003.

Lost time injury rate BASF employees

(Per million working hours)

0.9

2011 0.5

0.6

0.8

2010 0.5

1.3

1.0

2009 1.7

0.7

Lost time injury rate contractors

(Per million working hours)

1.2

2011 0.7

0.6

1.2

2010 0.6

0.7

1.5

2009 1.7

0.7



A plant at the Geismar, Louisana, site at dusk. Rail cars lined up at Freeport, Texas, Verbund site.



Report 2011Employees BASF Employees

Balancing work and familyAt BASF, an inspiring and flexible work environment is a fundamental aim of our Talent Strategy. To achieve this, we need to be even more responsive to the needs of employees across varying life stages, and offer them appropriate solutions. BASF’s “Designed to Fit” flexible work program allows employees to telework and create a work schedule that fits their personal lives. New concierge services help employees find local service providers for virtually all personal tasks, such as shopping and home repair. BASF also increased vacation time in 2012 for employees with less than 10 years at the company, and new hires, to be more in line with the market offering.

www.basf.com/careers

EmployeesEnabling, inspiring and engaging our people for today and tomorrow

The best team needs committed, performance-driven employees. We want to recruit and retain the best talent, and in doing so, create a diverse, inclusive and inspiring environment. We aim to be an attractive employer by offering our employees career development opportunities, competitive and comprehensive benefits and support to achieve a healthy work-life balance. Like many companies, we are experiencing significant demographic shifts. A number of our employees are retirement eligible; ‘next generation’ employees are entering the workforce with new expectations and work-styles; ‘minorities’ are becoming the majorities in the pools of talent coming out of colleges and universities and across our customer base. Faced with many convergent changes, BASF is striving to retain our talent, attract the very best talent, and foster diversity in our workplace —all to our competitive advantage. Living our talent strategyWe continue to make strides in establishing innovative recruitment, development and succession practices. Examples include:

− Organization-wide Talent Reviews enable us to identify and develop our people across businesses and functions—utilizing a consistent and transparent approach in which managers and employees engage in dialogue about career development. − A regional mentoring program is being rolled out in 2012 to enable cross-unit learning and create powerful connections between our people. − Pursuit of a vigorous recruiting strategy focused on strategic sourcing and external relationships—to attract top talent and to complement our internal pipeline. − Accelerated Development Programs provide undergraduates, PhDs and MBAs an opportunity to join BASF in a rotational development program, including international exposure, to jumpstart their career development.

− Use of social media to connect our employees internally, communicate and share knowledge across our organization, and reach out to prospective candidates and university students. − An array of learning and development opportunities are provided to match evolving business demands. Employees are encouraged to commit to lifelong development through formal training, online learning, coaching and on-the-job experience. − We are changing behaviors and mindset in how we drive innovation for our markets and customers. For leaders, BASF’s Leadership Academy courses focus on management and leadership skills development. Externally focused “spotlight behaviors” help us track not only what work gets done, but how it gets done. − A Transitions@Work flexible retirement planning initiative that helps BASF better transfer knowledge and expertise across generations and gives individuals nearing retirement more flexibility in determining how and when they will retire.

Creating value through diversityNorth America is one of the most diverse markets in the world. We value the differences in our workforce as they are key to the success of our business and to the achievement of our status as “partner of choice.” Building an inclusive environment that encompasses diversity of gender, race, experience and points of view is paramount not only to our future success, but to our ability to attract and retain the best people. In 2011, we focused on recruitment and retention, developing talent and diversity metrics, supplier diversity, external benchmarking, all with the goal of making BASF a place where the best people can do their best work. BASF’s employee groups — African American, Emerging Professionals & Friends, ALLchemie (LGBT) and Women in Business offer employees a convenient way to network, build knowledge and skills, and learn about BASF’s market and customer needs.

Unity loves diversity

At BASF, we understand that diversity—of people, experience, and perspective—is paramount to the success of our business and to the achievement of our status as an employer and partner of choice.

Employees – Number of Employees

13,920

2011 840

710

14,060

2010 780

690

13,710

2009 760

680


Diversity recognition

BASF Corporation was cited by readers of “Workforce Diversity for Engineering & IT Professionals” magazine as an employer for whom they would most like to work or that they believe would provide a positive working environment for members of minority groups.

In October, BASF was named a ‘2011 Top Company for LGBT Equality’ by “Work Life Matters” magazine.

“Workforce Diversity Magazine” recognized BASF as a top 50 employer.



Report 2011Community Relations Science Education Initatives

BASF plays an active role in society overall, as well as in the communities in which we operate. The company has active community relations efforts in its site communities to foster mutually beneficial relationships based on trust and respect. Some of our most important stakeholders include employees, neighbors, community leaders, nonprofit organizations and policy makers.

Dialogue with our neighborsBASF works to build an environment where ongoing dialogue is solicited and encouraged. In North America, there are approximately 30 Community Advisory Panels (CAPs) composed of local citizens in our site communities who engage with BASF personnel on topics such as safety, health and environmental protection.

Making Communities BetterThrough our corporate charitable contributions and community relations programs, we support activities in science education; environment, health and safety; sustainable development; and community initiatives. Our employees, through their generous spirit, are a key resource and natural extension of our work. Together, we position BASF as a leader, role model and indispensable corporate citizen. In 2011, BASF made more than 200 charitable contribu-tions to local chapters of the American Red Cross and United Way, Special Olympics New Jersey and the Children’s Specia-lized Hospital Foundation, among other nonprofit groups. BASF also supports and encourages students to enjoy and pursue their interest in science. Many of our sites give annual scholarships to high school students who excel in science and will be pursuing science-related degrees in college. We also award grants to help schools enhance science curriculum. In addition, BASF funds hands-on learning programs such as Kids’ Lab offered across the region. We also support many organizations that share our mission to protect the environment. For example, we have supported

Community RelationsFostering mutually beneficial relationships

the Land Conservancy of New Jersey Partners for Parks program, the Great Swamp National Wildlife Refuge Center and contributed to a sturgeon spawning habitat to restore the fish population in the Detroit River through the International Wildlife Refuge. In addition, BASF has a commitment to sustainable remediation of former manufacturing sites, creating better environments for future generations. In conjunction with local schools, two such sites, one in Michigan and one in New York, are used to educate students on the environment. Both properties have received Corporate Lands for Learning certifications from the Wildlife Habitat Council. BASF employees also dedicated their time as volunteers at a variety of organizations such as the American Cancer Society, American Diabetes Association, Boys and Girls Clubs of America, Habitat for Humanity, Leukemia & Lymphoma Society and many other local nonprofits.

www.basf.us/community

Future scientists

BASF partnered with Fairleigh Dickinson University (FDU) on its first Science Academy program for 20 high potential high school students who have a strong interest in chemistry and science. Residing on FDU’s campus for two weeks, the students studied college level chemistry and developed their own personal care products using BASF materials.

Science AcademyBASF hosted our first Science Academy program in Morris County, New Jersey, for 20 high-potential high school students who have a strong interest in chemistry and science. BASF partnered with Fairleigh Dickinson University (FDU) to provide an on campus residence program that gave the students valuable life experience in a college setting, coupled with advanced-level science and practical business knowledge. During the program, students worked in teams to research and develop their own personal care products using BASF materials. Their projects included consumer research, product design, supply chain planning and marketing. Students received certificates of achievement from BASF; two transferable college science credits from FDU; and the promise of a $5,000 scholarship to any Science Academy student who chooses to attend FDU in the fall of 2012.

Kids’ Lab – hands on learning with chemistryBASF Kids’ Lab is a global program that enables children (ages 6–12) to experience the magic of chemistry through safe and engaging, hands-on experiments that illustrate the positive effects of chemistry on our daily lives. A Kids’ Lab session includes educator-led instruction, interactive chemistry experiments and takeaway items for each participant. In 2011, Kids’ Lab was expanded across North America to an audience of more than 8,000 through programs at Liberty Science Center in Jersey City, New Jersey; Detroit Science Center in Michigan; Gulf Coast Exploreum in Mobile, Alabama; Children’s Museum of Houston in Texas; and Louisiana Art & Science Museum in Baton Rouge, Louisiana. In addition, BASF volunteers from 18 company locations ran more than 30 programs for schools in their local communities.

Kids X-press magazineRead all about it! Kids X-press is a magazine written by kids for kids. Through a partnership with BASF a new, special edition was created with stories, pictures, games and ideas about what science is and how BASF creates chemistry in our daily lives. The first BASF edition was published in July 2011 with more issues planned for 2012. Approximately 33,000 copies of Kids X-Press were distributed to all BASF North America employees, science centers running the Kids’ Lab program and local schools in BASF site communities.

You Be the Chemist ChallengeFor the past five years, BASF has sponsored the You Be the Chemist Challenge (YBTC). Coordinated with the Chemical Education Foundation, a national non-profit organization that works with the chemical industry to promote the importance of chemicals, chemistry and chemical safety awareness education, the program continues to grow within BASF and in its communities with more than 500 students participating. The YBTC Challenge is a fun and innovative academic competition that engages fifth to eight grade students in learning about important chemistry concepts, discoveries and safety. Based on National Science Education Standards, competitions take place across the country, encouraging the collaboration of community organizations, schools and the chemical industry. BASF has hosted YBTC Challenge competitions in communities where it operates in North Carolina, South Carolina, Pennsylvania, New Jersey and Michigan.

The first graduating class of BASF’s Science Academy wearing their own tie dyed lab coats.

Students planting flowers at BASF‘s former site in Rensselaer, New York.

A living classroom

BASF opened its environmental education classroom and wildlife habitat at the site of the company’s former manu-facturing facility in Rensselaer, New York. Students in the Rensselaer City School District have the opportunity to learn about local ecology and use the classroom to en-hance their environmental studies.

Science Education InitiativesToday’s students will be the thinkers, innovators and leaders of the future



Report 2011name of chapter Contacts

Contacts

Social media at BASF

BASF has multiple accounts on the most popular social networks. Browse the content on Facebook, Twitter, YouTube, etc. and join the conversation.

Regional contacts:

BASF Corporation North America Headquarters100 Park AvenueFlorham Park, NJ 07932Tel: (973) 245-6000Fax: (973) 245-6002

BASF Canada100 Milverton Drive, 5th floorMississauga, ON L5R 4H1Tel: (866) 485-2273Fax: (289) 360-6000

BASF Mexicana, S.A. de C.V.Insurgentes Sur 975Col. Ciudad de los Deportes03710 Mexico, D.F.Tel: 52-55-5325-2600

Division contacts:

Care Chemicals: BASF Corporation100 Park AvenueFlorham Park, NJ 07932Tel: (973) 245-7838Fax: (973) 245-6714

Catalysts:BASF Corporation25 Middlesex/Essex TurnpikeIselin, NJ 08830Tel: (732) 205-5000Fax: (732) 205-7136

Coatings:BASF Corporation26701 Telegraph RoadSouthfield, MI 48033Tel: (248) 304-5453Fax: (248) 304-5766

Construction Chemicals:BASF Corporation23700 Chagrin BoulevardBeachwood, OH 44122Tel: (216) 839-7016Fax: (440) 627-6499

Crop Protection:BASF Corporation26 Davis DriveResearch Triangle Park, NC 27709Tel: (919) 547-2000Fax: (919) 547-2419 Dispersions & Pigments:BASF Corporation11501 Steele Creek RoadCharlotte, NC 28273Tel: (704) 587-2597Fax: (704) 587-8171

Inorganics:BASF Corporation1424 Mars Evans City RoadEvans City, PA 16033Tel: (724) 538-1381Fax: (724) 538-1260

Intermediates:BASF Corporation100 Park AvenueFlorham Park, NJ 07932Tel: (973) 245-6288Fax: (973) 245-6714

Nutrition & Health:BASF Corporation100 Park AvenueFlorham Park, NJ 07932Tel: (973) 245-7925Fax: (973) 245-6714

Paper Chemicals:BASF Corporation11501 Steele Creek RoadCharlotte, NC 28273Tel: (704) 587-1812Fax: (704) 587-1803

Performance Chemicals:BASF Corporation100 Park AvenueFlorham Park, NJ 07932Tel: (973) 245-6014Fax: (973) 245-6714

Performance Polymers:BASF Corporation1609 Biddle AvenueWyandotte, MI 48192Tel: (734) 324-5608Fax: (734) 324-6978

Petrochemicals:BASF Corporation1111 Bagby Street Suite 2600Houston, TX 77002Tel: (973) 245-6014Fax: (973) 245-6714

Polyurethanes:BASF Corporation26701 Telegraph RoadSouthfield, MI 48033Tel: (248) 304-5453Fax: (248) 304-5766

www.basf.us

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slideshare.net/BASFBASF took its Kids’ Lab program on the road to Brick Academy in Newark, New Jersey, where a student shows off the slime he created with chemistry.


Report 2011name of chapter38

BASF supports the worldwide Responsible Care® initiative of the chemical industry.

ContactFurther information

General inquiries: (973) 245-6000 or (800) 526-1072 (toll free) or visit basf.us

Publisher: BASF Corporation, 100 Park Avenue, Florham Park, NJ 07932

Corporate Media Relations: Andreas Meier, Tel: (973) 245-6072 Betsy Arnone, Tel: (973) 245-7865 • John Schmidt, Tel: (973) 245-6405

Sustainability: Charlene Wall, Tel: (973) 245-6438

Investor Relations: Markus Zeise, Tel: (973) 245-6013

Design: Coyne Public Relations Photography: Steve Berg, Insight Photography; Fred Smith Associates

You can find this publication online and order print copies at basf.us/reports

Documents

BASF in North America Report 2011 BASF in North … in North America Report 2011 BASF’s segments Chemicals In the Chemicals segment, we supply products to customers in the chemical,